With less than a fortnight left for the Union Budget 2020, sources indicated that Finance Minister Nirmala Sitharaman is likely to address new-age challenges in her Budget speech.

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“The Budget is likely to give a direction for policy intervention to deal with sudden price rise of specific commodities such as onions and tomatoes, which have been fuelling inflation recently,” the sources added.

Retail inflation soared to a five-and-a-half-year high of 7.35 percent in December 2019, with the shortage of onions driving the surge.

According to the recent data released by the National Statistical Office on January 13, retail inflation based on the Consumer Price Index was only 2.11 percent in December 2018 and 5.54 percent in November 2019.

The hike in inflation in the ‘vegetables’ category was at 60.5 percent last month in comparison to December 2018. Onion prices were above the Rs 100 per kg mark in many major cities last month, due to a 26 percent fall in production. Overall, food inflation rose to 14.12 percent in December as against a negative rate of -2.65 percent in the same month of the previous year. It was also significantly higher than the 10.01 percent recorded in November 2019. Along with vegetables, high prices of pulses, meat and fish also contributed to last month’s spike.

It is also understood, that the finance minister is likely to highlight the government’s intent to have specific policies and funds for air pollution, drinking water conservation, destroying plastic waste, the sources added.

Prime Minister Narendra Modi last year had urged farmers to opt for less water-intensive crops and irrigation methods that will help conserve water, while launching the Atal Jal Yojana, aimed at improving groundwater level.

“Budget is likely to give substantial allocations for Jal Jeevan Mission – which works towards delivering piped water supply to every house, and Atal Jal Yojana, which will pay special attention to those areas where groundwater is very low,” the sources said.

The upcoming Budget could also present special schemes for dealing with climate change and enhance allocations for clean and renewable energy, to reduce dependence on fossil energy. Measures for promoting solar, hydel and wind energy are likely to be introduced with an aim to reduce $150 billion worth energy imports.